Home › 6a) Gold & Monetary Metals › 6a.) GoldCore › ETF Gold Demand Soars while Consumer Demand Slows
Permanent link to this article: https://snbchf.com/2021/03/flood-etf-gold-demand-soars-consumer-demand-slows/
Donate to SNBCHF.com
Donate to SNBCHF.com Via Paypal or Bitcoin To Help Keep the Site Running
Please consider making a small donation to Snbchf.com. Thanks
Bitcoin wallet: bc1qa2h6hgd0xkuh7xh02jm5x25k6x8g7548ffaj3j
Receive a Daily Mail from this Blog
Live Currency Cross Rates
On Swiss National Bank
-
SNB Sight Deposits: decreased by 5.6 billion francs compared to the previous week
8 days ago -
USD/CHF stays above 0.9100 nearing the highs since October
22 days ago -
Pound Sterling falls back as upbeat US Retail Sales strengthen US Dollar
23 days ago -
Canadian Dollar remains vulnerable after strong US Retail Sales
23 days ago -
2024-04-09 – Martin Schlegel: Interest rates and foreign exchange interventions: Achieving price stability in challenging times
29 days ago
Main SNB Background Info
-
SNB Sight Deposits: decreased by 5.6 billion francs compared to the previous week
8 days ago -
The Secret History Of The Banking Crisis
2017-08-14 -
SNB Balance Sheet Now Over 100 percent GDP
2016-08-29 -
The relationship between CHF and gold
2016-07-23 -
CHF Price Movements: Correlations between CHF and the German Economy
2016-07-22
Featured and recent
-
Trade Republic: Geschäftsmodell in Gefahr!
-
EURUSD trades to new lows for the day/week and approaches a key target support level
-
Gareth Soloway On The Next Big Moves in Gold and Silver
-
1 Bier fĂĽr 20€ – Warum Du die Inflation unterschätzt
-
“Deutsche müssen weniger konsumieren, reisen, Fleisch essen und Auto fahren!”
-
“Komm in meine WhatsApp-Gruppe” – Xenias schlechtester Tipp
-
AUDUSD bounces ahead of the 100-day MA today. What next technically for the pair?
-
5 Zeichen, dass du finanziell besser da stehst als die meisten! #läuft
-
Fremdgeld-Challenge – Der FAKE Traum vom schnellen Geld
-
Hast Du Deine Finanzen im Griff? #shorts
More from this category
- Market Pushes the Yen Lower, Helped by a Broadly Firmer Greenback
7 May 2024
- It’s the PPI Once More!
6 May 2024
- Get Ready for Weaker Growth and Higher Inflation. The Consensus Was Wrong.
6 May 2024
- The Fallacy of “Racism Equals Power Plus Prejudice”
6 May 2024
- Yen Slips, Yuan Jumps, Dollar is Mostly Softer
6 May 2024
- Killing the Golden Goose: Millennials Earn Less Than Their Parents Did
6 May 2024
- There Is No Prosperity without Private Property
6 May 2024
- Javier Milei vs. the Status Quo
5 May 2024
- Privatize Driver’s Licenses
5 May 2024
- Does Libertarianism Reject Communities? Libertarianism Actually Strengthens Them
5 May 2024
- Low Time Preference Leads to Civilization
5 May 2024
- Why the West Is Giving Up on Individual Rights
5 May 2024
- Cowardice, Not Courage, Led House Republicans to Side with the Democrats
5 May 2024
- The FBI and CIA Are Enemies of the American People
5 May 2024
- Conservatives Are Wrong on Economics. Here’s How to Fix the Problem.
5 May 2024
- The Homo Economicus Myth
4 May 2024
- How State-Sponsored Universities Distort Campus Activism
4 May 2024
- May 2024 Monthly
4 May 2024
- State Coercion and the Injustice of Apartheid
4 May 2024
- Consumer Confidence
4 May 2024
ETF Gold Demand Soars while Consumer Demand Slows
Published on March 19, 2021
Stephen Flood
My articles My videosMy books
Follow on:
What’s in store for gold demand fundamentals for 2021?
Increased consumer demand in China and India will help support the gold price in 2021. There is little doubt that investment demand – especially into Exchange Traded Funds (ETFs), the similar products was the main driver of the gold price higher in 2020. According to World Gold Council data, total ETF demand surged 120% from 398.3 tonnes in 2019 to a new record high in 877.1 tonnes in 2020. However, consumer demand, comprised of jewellery plus bar as coin demand declined a significant 22% in 2020 from 2019. Jewelry demand was hit hardest with a decline of 34%.
Looking back to 2020, the first chart below breaks down gold demand in 2020 by sector. Jewellery comprised 38% of demand in 2020, Physical Bar alongwith Coin 24%, and so on. The smaller chart shows the percent of consumer demand for the top 10 countries, which comprise 67% of total consumer demand. In 2020 China and India accounted for 46% of consumer demand.
China’s consumer demand in 2020 was 28% lower than in 2019, alongwith 54% below the 2013 peak.
The Optimistic Appoarch
Turning to the outlook for 2021. UBS now forecasts China’s economy to grow more than 9% in 2021, the fastest growth in a decade. This is raised from initial estimates of growth of around 8.2% due to the increased exports as the result of the $1.9 billion US fiscal package passed this week. The updated UBS forecast also expects, Chinese GDP is likely to expand more than 19% this quarter.When compared to the first three months of 2020, when the nation was in lockdown. This rapid economic growth will boost gold demand to 2019 levels.
The WGC Council reports that their “fieldwork indicates an optimistic attitude among major jewellers in China. Who experienced strong sales in recent months. The main reasons behind the more positive outlook over the coming months are:
China Gold Consumer Demand, 2010-2020
- Click to enlarge
Measures to increase the demand of Gold in India
The second largest consumer of gold is India, where consumer demand declined by 35% in 2020 from 2019 levels. However, on top of the economic recovery from the Covid-19 pandemic the budget announced on February 1 had several measures since it will help boost gold demand. The most prominent one being the reduction of the gold import duty. The budget also announced the authorisation of the Securities with Exchange Board of India (SEBI) as the regulator for domestic gold spot exchanges and the establishment of welfare schemes for rural areas to boost incomes.
According to the World Gold Council: “The lower import duty will likely enhance consumer demand and discourage unofficial imports. Oversight by SEBI may spur infrastructure development and likely lead to higher trading and more effective gold price discovery. And the rural welfare schemes may indirectly support gold demand through income growth. We believe that this, combined with better gold policies, could bode well for India’s gold industry in 2021 and beyond.”
Bottom Line: The gold and silver markets are global and the increased consumer demand in China and India, accounting for close to 50% of consumer demand, will help support the gold price in 2021. This additional consumer demand driven support is additional to investment demand driven by governments supressing yields in coming years. The global nature of gold and silver is part of what makes the metals truly real money as they are accepted the world over. Gold and silver are wealth that sustains in the absence of banks, debt or governments.
India Gold Consumer Demand, 2010-2020
- Click to enlarge
Follow on:
No related photos.
Tags: Commentary,Daily Market Update,Featured,gold demand,newsletter,World Gold Council